Tuesday, December 26, 2017

Destroying Bad Ideas - Part II

Charlie Munger has talked about the importance of routinely ridding oneself of the ideas -- often inferior yet, due to various biases and misjudgments, still favored -- that inevitably accumulate over time.

Destroying Bad Ideas - Part I

The problem is it's all too easy to do just the opposite -- to seek information that confirms what one already believes to be correct. In other words, after becoming enamored with a particular worldview, most don't enjoy later admitting that the 'story' they've long believed -- especially when previously embraced with enthusiasm and vigorously defended -- was far from perfect!

"The ability to destroy your ideas rapidly instead of slowly when the occasion is right is one of the most valuable things." - Charlie Munger at the 2006 Wesco Annual Meeting

So, instead, way too much energy is spent defending the flawed outlook while, at the same time, continuing to seek 'proof' of being 'right all along'.

"The first principle is that you must not fool yourself -- and you are the easiest person to fool." - Richard Feynman

Preferred views of reality have a more than decent chance of being riddled with defects. It's expecting that as the norm then attempting to be just a bit less wrong over time. This makes necessary an "ability to destroy your ideas rapidly" which is, well, more than challenging enough.

Developing, as a reliable mental habit, the capacity to get rid of subpar ideas depends on humility more so than brilliance.

With the above in mind consider what Charlie Munger said at the Daily Journal (DJCO) meeting earlier this year.

Munger, at the meeting, was asked which one of his ideas he found to be most difficult to destroy.

His answer:

"Well I've done so many dumb things that I'm very busy destroying bad ideas because I keep having them. So it's hard for me to just single out one from such a multitude. But I actually like it when I destroy a bad idea because...I think it's my duty to destroy old ideas. I know so many people whose main problem of life, is that the old ideas displace the entry of new ideas that are better. That is the absolute standard outcome in life. There's an old German folk saying...'We're too soon old and we're too late smart.' That's everybody's problem. And the reason we're too late smart is that the stupid ideas we...already have, we can't get rid of!...in most fields you want to get rid of your old ideas. And it's a good habit, and it gives you a big advantage in the competitive game of life since other people are so very bad at it. What happens is, as you spout ideas out, what you're doing is you're pounding them in. And so you get these ideas and then you start agitating and saying them and so forth. And of course, the person you're really convincing is you who already had the ideas. You're just pounding them in harder and harder. One of the reasons I don't spend much time telling the world what I think about how the federal reserve system should behave and so forth is I know that I'm just pounding the ideas into my own head when I think I'm telling the other people how to run things. So I think you have to have mental habits that -- I don't like it when young people get violently convinced on every damn cause or something. They think they know everything. Some 17 year old who wants to tell the whole world what should be done about abortion or foreign policy...or something. All he's doing when he or she spouts about what he deeply believes is pounding the ideas he already has in, which is a very dumb idea when you're just starting and have a lot to learn.

So it's very important that habit of getting rid of the dumb ideas. One of things I do is pat myself on the back every time I get rid of a dumb idea. You could say, 'could you really reinforce your own good behavior?' Yeah, you can. When other people won't praise you, you can praise yourself. I have a big system of patting myself on the back. Every time I get rid of a much beloved idea I pat myself on the back. Sometime several times. And I recommend the same mental habit to all of you. The price we pay for [not] being able to accept a new idea is just awesomely large. Indeed a lot of people die because they can't get new ideas through their head."

Charlie Munger's known for saying"I have nothing to add."

Well, it seems best to behave the same way when something as wise as the above is said.

Adam

No position in DJCO

Related posts:

Destorying Bad Ideas - Part I
Investing Blunders
Buffett's $ 200 Billion Blunder

This site does not provide investing recommendations as that comes down to individual circumstances. Instead, it is for generalized informational, educational, and entertainment purposes. Visitors should always do their own research and consult, as needed, with a financial adviser that's familiar with the individual circumstances before making any investment decisions. Bottom line: The opinions found here should never be considered specific individualized investment advice and never a recommendation to buy or sell anything.
 
Site Meter